Sub-Saharan Africa could boost its economy by about 4% over the next decade through artificial intelligence, a new International Monetary Fund paper has found.
However, the Fund also warned that this can happen only if it urgently addresses critical gaps in electricity access, internet connectivity, and digital skills.
Without those reforms, the growth dividend from AI could be as low as 0.2% over the same period, a figure the paper’s lead author described as negligible, as the region risks capturing only a fraction of the global AI boom’s economic benefits.
The paper, released on Tuesday, found that Sub-Saharan Africa ranks lowest on the IMF’s AI Preparedness Index, trailing every global region except South Asia in AI adoption rates, with infrastructure bottlenecks, skills shortfalls and weak regulatory capacity cited as the primary barriers.
What the IMF is saying
Martin Schindler, Deputy Division Chief and Mission Chief in the IMF’s African Department and lead author of the paper, said the scale of what is at stake for the region makes policy action an urgent priority rather than a long-term consideration
- “Policy changes will be key to whether further growth can be unlocked from AI,” Schindler told Reuters, warning that without decisive action many sub-Saharan African countries could see productivity and growth gains of just 0.2% over the next decade.
- “Frankly, that’s a rounding error,” he added, framing the low-action scenario as effectively leaving the region on the margins of one of the most significant economic transformations of the current era.
The paper warned that the central risk for Sub-Saharan Africa is not technological disruption but the pace of adoption.
- “For Sub-Saharan Africa, the central concern is not the risk of technological disruption, but whether countries will be able to adopt, adapt, and scale AI quickly enough to capture its benefits and avoid falling further behind,” the paper stated.
Co-author Andrew Tiffin said electricity is the foundational constraint that all other reforms depend on.
- “It’s hard to have anything without electricity,” he said, noting that the arrival of AI had added a new dimension to Africa’s longstanding power access challenge, since data centres could also become bankable investment projects that accelerate electrification efforts.
More insights
The IMF paper outlined specific infrastructure gaps holding back AI adoption and identified targeted interventions that could help bridge them.
- Around half of Sub-Saharan Africa’s population lacks reliable power, with the report recommending targeted grid and mini-grid investments around schools, clinics and other public facilities to create local digital hubs capable of supporting AI adoption at community level.
- Internet connectivity is a parallel constraint, with only 38% of Africans using the internet in 2024 compared to 68% globally. The paper said greater investment in fibre backbones and open-access networks could lower costs and expand access significantly.
Africa hosts only about 160 data centres, representing roughly 5.5% of the global total, with nearly half concentrated in South Africa, Nigeria and Kenya, a distribution the report warned could widen regional inequalities if AI investment continues to cluster in the same markets.
What you should know
The report builds on the IMF’s earlier assessment that Sub-Saharan Africa needs deeper structural reforms to improve its economic outlook, even as fiscal pressures persist across the region.
- Earlier this year, Nairametrics reported that IMF project that Sub-Saharan Africa’s fiscal outlook is expected to weaken in 2026 despite stronger commodity prices providing some support to external balances in parts of the region.
- The projection is contained in the International Monetary Fund’s (IMF) April 2026 Regional Economic Outlook titled Hard-Won Gains Under Pressure.
According to the report, the median fiscal deficit across Sub-Saharan Africa is forecast to widen to 3.2% of GDP in 2026.
